Tencent, NetEase and other game stocks collapsed What is the impact of the "Measures for the Administration of Online Games" on game companies?
On December 22, the National Press and Publication Administration issued the Measures for the Administration of Online Games (Draft for Solicitation of Comments) (hereinafter referred to as the "Draft for Comments"), aiming to strengthen the standardized management of the industry and promote high-quality and sustainable development, and the deadline for feedback is January 22, 2024.
Article 18 of the Draft for Comments mentions "restricting excessive use and high consumption of games", i.e., online games are not allowed to set inducing rewards such as daily login, first top-up, and continuous top-up. Online game publishing business units must not provide or condone high-priced transactions of virtual props through methods such as speculation or auctions. All online games must set user recharge limits and publicize them in their service rules, and pop-up warnings should be given to users' irrational consumption behaviors.
Although it is currently considered that the Draft for Comments has already had a substantial impact on game companies. On December 22, as of midday, Tencent Holdings (0700) fell more than 7%, NetEase (9999) fell more than 12%, Feiyu Technology (1022), CMGE (0302), Bilibili (9626), XD (2400), etc. fell more than 5%.
As of press time, NetEase fell more than 24%, and XD Company, Bilibili, Tencent Holdings, CMGE, etc. fell more than 10%.
As of press time, Shengtian Network (300494) fell more than 16%, Baotong Technology (300031) fell more than 14%, Shenzhou Taiyue (300002), Palm Fun Technology (300315), Zitian Technology (300280) and other stocks fell by more than 11%, and Sanqi Mutual Entertainment (002555) and other stocks fell to the limit.
In a practical sense, if the "Draft for Comments" is implemented, players will gather on really good games, which is also a kind of macro control baton, and the goal is still to make games high-quality. It can avoid irrational consumption and block the huge social controversy that may exist in the game industry, which is essentially to encourage game manufacturers to stick to users through innovative gameplay and experience, rather than using marketing methods to trick users.
If the gameplay experience is good enough, why "force" users to check in through some rewarding means? Some mainstream boutique games will not have this problem, mainly some copycat and skin-changing games, such as the flood of legendary games, which rely on routines to attract users and stimulate consumption, which will be more easily affected.
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